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Alpine Industrial Park is an opportunity to invest in a curated asset sourced through the Cadre network that is underwritten and managed by an institutional sponsor, Rising Realty Partners. Rising Realty Partners is under contract to acquire Alpine Industrial Park for $22mm. A 6-building, 148k sf flex/light industrial park located in Sacramento, CA.
Attractive Location in a Supply-Constrained Market
Diverse Tenant Base with Near-Term Rent Growth Upside
Institutional Sponsorship with Proven Track Record
Industrial real estate’s growing demand has largely been driven by a secular shift in retail towards e-commerce, which has grown at a 16.1% CAGR since 2010 yet still only represents 13.5% of total retail sales.3
Alpine Industrial Park is currently 83% occupied by a diverse mix of tenants, with no single tenant occupying more than 10% of the total sf. The business plan entails proactively managing the rollover of existing tenants, marking rents to market rates, and aggressively pursuing early renewals from tenants expiring during our hold.
Rising Realty Partners is a family-owned, Los-Angeles based, vertically-integrated real estate investment and operating platform specializing in creating world-class commercial properties. They pride themselves on having built a strong reputation in the industry as an innovative and trusted management company through a proven track record. The firm offers services in acquisitions & investment analysis, asset management, construction management, development and property management.
With over 100 years of combined industry experience, their team has a unique understanding of the ins and outs of developing and managing all types of asset classes and sizes including office, retail, data center, residential, entertainment, medical, industrial. The Rising Realty Partners team draws from the remarkable relationships and experiences of Nelson Rising through a flat management structure and continuous communication. As Chairman, Nelson’s vision and 40+ years of experience in real estate, politics and finance is at the foundation of the Sponsor’s philosophy of creating great places.
Please see the Sponsor Overview section of the Investment Memo for additional details.
As with most industrial investments, primary risks include new supply, tenant mobility, capital improvement cost overruns or an economic downturn. We believe these are mitigated by (i) a business plan consistent with prior business plans undertaken by the Sponsor; (ii) the Sponsor’s directly relevant experience and track record; and (iii) local market condition and continued demand for industrial product.
Please reference the Investment Memo for additional risk factors.
The Sponsor is committing approximately $900k (10%) of total equity to the transaction. The remaining share, approximately $8.3mm (90%), will come from Cadre’s investor partnership.
Cadre has committed to backstop the investor partnership’s share of the transaction.
The Sponsor has executed a term sheet for a 64% loan-to-cost (~$15.8mm) acquisition loan. The loan has an initial term of 60 months, and the rate is SOFR+235 bps with a SOFR floor of 10bps. The loan is interest only for 48 months.
We anticipate closing the underlying Asset on or around Feb 24, 2022 (“Asset Close”). We anticipate holding an initial investor closing on or around middle of March 2022 (the “Initial Close”).
Through the Cadre Secondary Market, you may have an option to offer your position for sale on our platform at a target sale price based on the net asset value (“NAV”) of the investment at that time. Investments are typically eligible to post on the Cadre Secondary Market six months after the initial investor closing. However, liquidity and pricing are not guaranteed. Prior to investing, you should assume that you may be required to hold your investment for the duration of Cadre’s hold period.
See important disclosures below
Cadre is offering unique opportunities to invest in a curated selection of deals sourced through our network of sponsors. All sponsors have been evaluated by Cadre.Please see below to learn more about the differences between curated and principal deals at Cadre.
We intend to make regular (~quarterly) distributions from available cash flow. These distributions may vary depending on each period’s cash flow and capital requirements.
As a curated deal, the Sponsor will generally solely control whether and when distributions are made from the joint venture to the Cadre investor partnership (but we’ll generally participate pro rata in most distributions prior to promote payments). If funds are received by the investor partnership we work to distribute as efficiently as possible but, given the involvement of multiple parties, timing can and does vary.
3.25% commitment fee on the investor’s capital commitment;
1.75% annual asset management fee on the fair value of the Cadre fund’s investment in the joint venture. Refer to Section 8.6 of the Partnership Agreement for a definition of “fair value.”
Other deal fees are charged by the LLC joint venture. Investors should review the Investment Memo for complete fee disclosures and descriptions.
Investors who commit or fund after the Initial Close (defined above) will be subject to contribution interest calculated at a 6% annual rate from the Initial Close to the date of the subsequent investor close. The contribution interest is paid to a Cadre affiliate that funds the remaining equity between the date Cadre closes on the underlying Asset and subsequent investor closings. Any such cost will be deducted from the investor’s initial distribution(s).
Regardless of when they commit or fund, all investors are entitled to their share of Asset cash flows (if any) from the Initial Close onward. More details can be found under "Subsequent Closings" in the "Summary of Principal Terms of the Investor Partnership" of the Final Investment Memo.
Investors will purchase an ownership interest in a Delaware limited partnership managed by Cadre. The Cadre partnership entered into an LLC joint venture formed and managed by the Sponsor that directly or indirectly owns the property.
The Sponsor is responsible for providing Cadre with reporting data that we use to prepare updates for the investor partnership. Investors can expect to receive the following:
Property Updates: We provide quarterly updates for each property with a targeted delivery of 45 days after quarter-end. An online summary and full downloadable report can be accessed through our Portfolio page.
Capital Balance Statements: We publish investor capital balances on our Portfolio page. We also provide quarterly downloadable statements roughly 60 days after quarter-end. All current and historical statements are available for download on our Documents page.
Tax Reporting: For U.S. taxpayers, we aim to provide annual K-1 statements in a timely manner but cannot guarantee that they will be available prior to April 15th. All current and historical statements are available for download on our Documents page.